SpendingPulse tracks 3.5% rise in US holiday sales

U.S. retail sales rose 3.5 percent during the holiday season this year, helped by deep discounts at malls and purchases of children's apparel and jewelry, MasterCard Advisors SpendingPulse said.

Sales of holiday-related categories such as clothing, electronics and luxury goods rose 2.3 percent from Nov. 1 through Dec. 24 compared with a year earlier, the Purchase, N.Y.-based research firm said Thursday.

SpendingPulse tracks total U.S. sales at stores and online via all payment forms.

Falling store traffic in recent weeks and uneven demand, especially for apparel, spurred chains to risk earnings by pouring on the discounts to generate sales. Retailers including Gap Inc. were offering as much as 75 percent off and some, including Macy's Inc. and Kohl's Corp., were keeping stores open around the clock starting Dec. 20.

"You are seeing, 'It's OK for me to go out and spend,' " Sarah Quinlan, a senior vice president at MasterCard Advisors, said Thursday. "That being said, they are still being cautious, and they are picking their retailers. It is not hot 2006-2007 spending we are seeing."

Sales were strongest in jewelry and children's apparel, while sales of electronics and luxury items excluding jewelry were about the same as last year, SpendingPulse said. Sales of women's and men's apparel fell from last year, the researcher said.

Less than predicted

The SpendingPulse data largely tracked researchers' expectations for the holiday season. The National Retail Federation reiterated Dec. 12 its prediction that total sales will rise 3.9 percent in November and December, more than the 3.5 percent gain a year ago. Chicago-based researcher ShopperTrak has said holiday purchases will rise 2.4 percent, the smallest gain since 2009.

Sales at retailers' stores open at least a year climbed 2.7 percent in the week ending Dec. 21 from a year earlier, the International Council of Shopping Centers said Dec. 24. The New York-based trade group maintained its projection that retailers will report comparable-store sales increases of 3 to 4 percent for December when they issue their latest monthly reports.

To capture shoppers' attention, stores deepened discounts, promoting extra deals in the last days before the Christmas holiday. The promotions were the most prevalent since 2008, said Craig Johnson, president of Customer Growth Partners in New Canaan, Conn.

"It appears 50 percent off has been the price of entry this year," Simeon Siegel, a New York-based analyst at Nomura, wrote in a note to clients Dec. 24. "Although there will be some holiday sales winners, very few will escape the discount-driven pressures on margin."